Must use EXCEL to answer the question uestion 2 25 pointsSave Answe Maintenance
ID: 2551340 • Letter: M
Question
Must use EXCEL to answer the question
uestion 2 25 pointsSave Answe Maintenance money for a new building has been sought. Mr. Kendall would like to make a donation to cover all future expected maintenance cost for the building. These maintenance costs are expected to be $50.000 each year for the first 5 years and $70,000 each year after that. The building has an indefinite service life. How much should be put into a account that will pay 11% interest to pay the maintenance over its infinite life? $513438 $432,987 $786,886 $562.446Explanation / Answer
The Answer is D - $ 5,62,446
Calculation
= $ 50,000 (PVAF 11%,5Years ) + [ ( $ 70,000/.11)*PVF 11%,5Years ]
= [ $ 50,000 x 3.6958 ] + [ $ 6,36,364 x 0.5934 ]
= $ 1,84,790 + $ 3,77,618
= $ 5,62,408 (Rounding Difference)
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